The surging price of oil has been a major unexpected economic shock to the global aviation industry. The impact has had varying severity on different carriers around the world. Now, United Airlines has revealed that it expects to spend an additional $6 billion this year, according to CBS News.

The downturn in profits has been so damaging that it effectively bankrupted Spirit Airlines for a third time, leading to its final liquidation. United is not in that kind of financial jeopardy, however, the gigantic cut it will take from the profit margin of the carrier is certain to be reflected in airfare prices and shareholder value.

The Cost Of Conflict: High Fuel Prices Equal Expensive Airfare

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United paid an extra $2.3 billion for fuel in the second quarter of 2026. The hike in prices follows the Joint US and Israeli attack on Iran under Operation Epic Fury, which has left the Strait of Hormuz in an uncertain state with very little oil flowing through the critical sea lane. While many regional allies of the US ship oil through Hormuz, the Iranian Navy and Air Force can effectively close the Strait by threat of military action. The prolific use of ‘suicide drones’ has made the risk extremely high for every vessel.

This situation has not yet been resolved, despite a significant reduction in hostilities. As the diplomatic process drags on, with highs and lows, there does not appear to be an obvious solution in sight that would allow for the normal flow of traffic to resume. Echoing the financial blowback suffered by United, Delta Air Lines also said last week that its second quarter earnings remain strong, but high fuel costs have reduced potential profits.

It is not expected that lower airfare prices will begin to hit the market in the near future due to the ongoing fuel crisis. Delta saw a 77% rise in fuel expenses in Q2 2026 compared to the same time last year, amounting to $4.4 billion. CEO Ed Bastian gave this brief remark to CNBC:

“Airfares are a function of supply and demand. The demand set is really strong, and the supply is in balance.”

Expensive Jet Fuel Means Fewer Options For Flyers

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On Tuesday, the price of jet fuel was at $3.64, which is less than the record high of almost $5.00 recorded in April during active combat between the US-Israeli Joint Forces and Iran. Still, Tuesday’s price is high enough for airlines to expect continued operating cost increases, which will keep airfare high and profits low. Due to the fuel shock outpacing early revenue gains, United’s second-quarter profits dropped 17.3% to $805 million.

Passengers are bearing the brunt of the crisis. What that is estimated to translate to in terms of service changes is a 15% fare increase and a 5% to 20% reduction in flight capacity depending on destination or route. Reduction to capacity will be implemented first on routes that return the lowest revenue or are most inefficient for fuel consumption and operations. Travelers will find a significant reduction in midweek options, Saturday flights, and overnight red-eyes, alongside continued suspensions of routes to Middle Eastern hubs like Tel Aviv and Dubai.

Airlines Around The World Scramble To Protect Shareholder Value

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The ongoing energy crisis has triggered a massive dynamic where airlines are aggressively transferring a $100 billion surge in fuel costs directly to passengers. According to data from the International Air Transport Association, skyrocketing jet fuel prices have threatened to decimate airline balance sheets, pushing total global fuel bills to $350 billion this year. As a result, the airline industry’s net profits are expected to be half of what they were in 2025, declining from $45 billion to approximately $23 billion.

Airlines are now making about $4.50 per passenger globally, down from $9.10 last year. The strategy to protect corporate profits translates into a noticeably more expensive, rigid, and inconvenient experience for travelers worldwide. Still, overall industry revenue is projected to rise 9.4% to $1.16 trillion, according to Reuters. With fewer budget airlines surviving, remaining passengers are forced onto major network carriers where they face higher base fares and aggressive fee hikes for secondary services, as well as the total disappearance of last-minute discount tickets.